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Alpha Natural Resources Inc (NYSE:ANR)
Beneish M-Score
-3.14 (As of Today)

The zones of discrimination for M-Score is as such:

An M-Score of less than -2.22 suggests that the company is not an accounting manipulator.
An M-Score of greater than -2.22 signals that the company is likely an accounting manipulator.

Alpha Natural Resources Inc has a M-score of -3.14 suggests that the company is not a manipulator.

ANR' s 10-Year Beneish M-Score Range
Min: -4.09   Max: -1.48
Current: -3.14

-4.09
-1.48

During the past 13 years, the highest Beneish M-Score of Alpha Natural Resources Inc was -1.48. The lowest was -4.09. And the median was -2.80.


Definition

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Z-Score) or business trend (F-Score), M-score can be used to detect the risk of earnings manipulation. This is the original research paper on M-score.

The M-Score Variables:

The M-score of Alpha Natural Resources Inc for today is based on a combination of the following eight different indices:

M=-4.84+0.92 * DSRI+0.528 * GMI+0.404 * AQI+0.892 * SGI+0.115 * DEPI
=-4.84+0.92 * 1.2613+0.528 * 0.6034+0.404 * 0.6659+0.892 * 0.8655+0.115 * 1.0149
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1054+4.679 * -0.0806-0.327 * 1.1198
=-3.14

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Dec14) TTM:Last Year (Dec13) TTM:
Accounts Receivable was $314 Mil.
Revenue was 1070.615 + 1050.592 + 1054.098 + 1111.773 = $4,287 Mil.
Gross Profit was 133.046 + 55.79 + 103.121 + 65.793 = $358 Mil.
Total Current Assets was $1,876 Mil.
Total Assets was $10,736 Mil.
Property, Plant and Equipment(Net PPE) was $8,342 Mil.
Depreciation, Depletion and Amortization(DDA) was $844 Mil.
Selling, General & Admin. Expense(SGA) was $152 Mil.
Total Current Liabilities was $1,010 Mil.
Long-Term Debt was $3,720 Mil.
Net Income was -121.661 + -184.975 + -512.627 + -55.698 = $-875 Mil.
Non Operating Income was 6.573 + 16.814 + 0.74 + 249.683 = $274 Mil.
Cash Flow from Operations was -30.711 + 17.861 + -217.048 + -53.961 = $-284 Mil.
Accounts Receivable was $288 Mil.
Revenue was 1093.7 + 1191.094 + 1335.123 + 1333.591 = $4,954 Mil.
Gross Profit was 75.75 + -54.53 + 70.629 + 157.584 = $249 Mil.
Total Current Assets was $1,988 Mil.
Total Assets was $11,799 Mil.
Property, Plant and Equipment(Net PPE) was $8,956 Mil.
Depreciation, Depletion and Amortization(DDA) was $921 Mil.
Selling, General & Admin. Expense(SGA) was $159 Mil.
Total Current Liabilities was $1,243 Mil.
Long-Term Debt was $3,398 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in receivables in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI=(Receivables_t / Revenue_t) / (Receivables_t-1 / Revenue_t-1)
=(314.015 / 4287.078) / (287.655 / 4953.508)
=0.07324686 / 0.05807097
=1.2613

2. GMI = Gross Margin Index

Measured as the ratio of gross margin in year t-1 to gross margin in year t.

Gross margin has deteriorated when this index is above 1. A firm with poorer prospects is more likely to manipulate earnings.

GMI=GrossMargin_t-1 / GrossMargin_t
=(GrossProfit_t-1 / Revenue_t-1) / (GrossProfit_t / Revenue_t)
=(55.79 / 4953.508) / (133.046 / 4287.078)
=0.05035482 / 0.08344845
=0.6034

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (1876.314 + 8341.974) / 10736.148) / (1 - (1988.424 + 8956.154) / 11799.258)
=0.04823518 / 0.07243506
=0.6659

4. SGI = Sales Growth Index

Ratio of sales in year t to sales in year t-1.

Sales growth is not itself a measure of manipulation. However, growth companies are likely to find themselves under pressure to manipulate in order to keep up appearances.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=4287.078 / 4953.508
=0.8655

5. DEPI = Depreciation Index

Measured as the ratio of the rate of depreciation in year t-1 to the corresponding rate in year t.

DEPI greater than 1 indicates that assets are being depreciated at a slower rate. This suggests that the firm might be revising useful asset life assumptions upwards, or adopting a new method that is income friendly.

DEPI=(Depreciation_t-1 / (Depreciaton_t-1 + PPE_t-1)) / (Depreciation_t / (Depreciaton_t + PPE_t))
=(921.294 / (921.294 + 8956.154)) / (844.267 / (844.267 + 8341.974))
=0.09327247 / 0.0919056
=1.0149

6. SGAI = Sales, General and Administrative expenses Index

The ratio of SGA expenses in year t relative to year t-1.

SGA expenses index > 1 means that the company is becoming less efficient in generate sales.

SGAI=(SGA_t / Sales_t) / (SGA_t-1 /Sales_t-1)
=(152.106 / 4287.078) / (158.987 / 4953.508)
=0.03548011 / 0.03209584
=1.1054

7. LVGI = Leverage Index

The ratio of total debt to total assets in year t relative to yeat t-1.

An LVGI > 1 indicates an increase$sgai= in leverage

LVGI=((LTD_t + CurrentLiabilities_t) / TotalAssets_t) / ((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
=((3719.519 + 1009.549) / 10736.148) / ((3398.434 + 1242.815) / 11799.258)
=0.44048089 / 0.39335092
=1.1198

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA=(IncomefromContinuingOperations_t - CashFlowsfromOperations_t) / TotalAssets_t
=(NetIncome_t - NonOperatingIncome_t - CashFlowsfromOperations_t) / TotalAssets_t
=(-874.961 - 273.81 - -283.859) / 10736.148
=-0.0806

An M-Score of less than -2.22 suggests that the company will not be a manipulator. An M-Score of greater than -2.22 signals that the company is likely to be a manipulator.

Alpha Natural Resources Inc has a M-score of -3.14 suggests that the company will not be a manipulator.


Related Terms

Altman Z-Score, Piotroski F-Score, Accounts Receivable, Revenue, Gross Profit, Total Current Assets, Total Assets, Property, Plant and Equipment, Depreciation, Depletion and Amortization, Selling, General & Admin. Expense, Total Current Liabilities, Long-Term Debt, Net Income, Non Operating Income, Cash Flow from Operations


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Alpha Natural Resources Inc Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 1.25230.97280.83290.97851.40610.76991.25850.66380.96861.2613
GMI 0.57461.18271.01671.26430.6891.13531.41421.03093.31130.6034
AQI 11.5980.93940.93520.40370.8970.72731.3370.47680.85470.6659
SGI 1.32271.11651.01321.65731.01081.56971.81450.98130.71020.8655
DEPI 00.85150.93210.69352.82620.68172.83520.61431.0171.0149
SGAI 0.73690.93891.38830.58052.3440.67661.16410.55931.06711.1054
LVGI 0.82141.00320.98940.96440.58460.96691.26771.18441.14071.1198
TATA -0.0475-0.0996-0.1092-0.1931-0.0578-0.1151-0.0848-0.2261-0.1022-0.0806
M-score 1.86-2.80-3.22-2.87-2.46-2.73-1.46-4.09-2.14-3.14

Alpha Natural Resources Inc Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
DSRI 0.66381.13361.00680.91040.96861.23541.04691.33141.26130.7959
GMI 1.03090.97850.91241.1253.31134.8513.60591.69840.60340.4738
AQI 0.47680.13640.98110.72390.85470.910.59080.74920.66590.4609
SGI 0.98130.80560.71810.72370.71020.74240.75940.79550.86550.849
DEPI 0.61432.47370.95131.03241.0171.02551.01731.00961.01491.0314
SGAI 0.55930.61541.06381.1161.06711.11941.1831.17011.10541.0222
LVGI 1.18441.29391.09971.18141.14071.10941.15991.1371.11981.0211
TATA -0.2261-0.229-0.072-0.1048-0.1022-0.1081-0.1231-0.0937-0.0806-0.0835
M-score -4.09-3.82-3.17-3.42-2.14-1.06-2.10-2.60-3.14-3.70
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